Italian energy company Eni CEO Claudio Descalzi said he expects net production to increase 4 percent from last year. Photo by Stephen Shaver/UPI | License Photo
July 27 (UPI) -- Italian energy company Eni said Friday it was expecting a 4 percent increase in oil and gas production from 2017 driven by gains across its entire portfolio.
Assuming the price for Brent crude oil at $60 per barrel, Eni said it expects to produce on average 1.9 million barrels of oil equivalent per day this year, a 4 percent increase from last year. Growth would be derived from new start ups from last year and support from the giant Kashagan oil field off the coast of Kazakhstan and the Goliat field in Norway.
Claudio Descalzi, the company's CEO, said the second quarter was a record-setter for Eni.
"In the context of a 38 percent rise in the price of Brent, Eni reported a 152 percent increase in operating profit, driven by the performance of the exploration and production business, which more than tripled its contribution," he said in a statement.
Eni spent about $4.2 billion in the first half of the year. Full-year spending is targeted at $8.9 billion.
Among its key assets, the Italian company said it started new processing units at its Zohr field in Egypt with additional startups scheduled for September. The project is producing about 1.1 billion cubic feet per day and the acceleration followed a start date in December.
The Central Bank of Egypt said natural gas is contributing to growth in gross domestic product. Elsewhere in gas, Eni said its sales in liquefied natural gas, a super-cooled form of gas that has more maneuverability than piped gas, was up 54 percent from the same period last year.
Oil production was supported by new work in Angola, a member of the Organization of Petroleum Exporting Countries. Combined with natural gas, production for Eni was up 5.2 percent from the same period last year.
Analysis from RBC Capital Markets found Eni missed the mark somewhat on net income at $890 million, versus its expectations of $1.3 billion. Cash generation was also less than expected, though RBC said it was net positive on the company.
"Eni should be a key beneficiary of a rising oil price, and despite the recent correction in crude, remains one of the better performers year-to-date," its statement read. "We continue to think the company's financial framework will improve into 2018 with cash flow going up and capital expenditures down."